Swiss and Lufthansa to launch new cargo pricing structure

Swiss WorldCargo and Lufthansa Cargo are to launch a two component pricing structure – a net rate plus airfreight surcharge – to reflect the "volatility of external cost factors".
A joint letter to customers states: “The new airfreight surcharge will be significantly lower compared to the combined fuel and security surcharges, which will be eliminated with the start of the winter flight schedule.
“As the surcharge level will be decreased, the change in the pricing structure will subsequently lead to a re-aligned and increased net rate that will reflect the real value of our service in an adequate way. Overall prices of transportation will remain at current levels.”
In countries that are subject to state regulation, such as Japan and Hong Kong, the airlines will retain the current surcharge structure.
Customers will be informed about the applicable airfreight surcharge levels in individual countries in a separate email.
The pricing structure is not an all-in rates offer, as first introduced by Emirates SkyCargo in January this year, a move that prompted several airlines, including Qatar Airlines and IAG Cargo, to introduce similar pricing structures.
The airfreight surcharge will be adjusted “whenever one of these external cost factors changes significantly and thus will display necessary price adjustments in a transparent way”.  
The airlines added: “This would not have been the case with an all-in rate, which we also investigated in detail. An all-in rate would have required a less transparent adjustment mechanism in the event of significant fluctuations in costs beyond our control.”
The letter is from SwissWorld Cargo’s Chief Cargo Officer, Oliver Evans, and Alexis von Hoensbroech, Lufthansa Cargo board member responsible for product and sales.
It continues: “Pricing structure has been the most dominating discussion in our industry in the recent past. Market developments have shown that we need to continue working on our pricing system in order to remain agile and sustainable in the future.
“We have been listening closely to you, our customers, who have been demanding a new and comprehensive pricing concept, to meet your needs and fulfill our own business requirements.”
The letter adds: “The new, market oriented airfreight surcharge reflects the volatility of external cost factors, such as fuel, exchange rates, flight dependent cost such as airport charges and fees, which are beyond our control.
“As in the past, we aim to be a straightforward business partner for you. The new re-aligned surcharge will allow us to largely avoid special processes such as negative rates and thereby shorten our transaction and response times to you."
It continues: “Our talks have shown that both reliable planning and flexibility are becoming increasingly important to you and your customers.
“For an insurance add-on, we will offer you the option of securing stable total rates for certain types of long-term contracts. We will also offer you more opportunities to sign long-term contracts with us whenever your or your customers’ needs arise for such contracts, and even when they extend beyond a single season.”

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